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By Swissquote Analysts
Published on 04.10.2022
Morning news

Credit Suisse Seeks to Calm Market Jitters

Topic of the day

Credit Suisse Group AG tried to assuage fears about its health in a memo to employees and in a round of phone calls to investors and clients, according to people familiar with the matter. Credit Suisse shares tumbled 9% early Monday and are down nearly 30% over the past month. Spreads on its credit-default swaps, a type of insurance against default, rose to their highest level of the year on Friday. The deteriorated market condition indicates that Credit Suisse could struggle to raise new shares to pay for a planned restructuring and that its funding costs could rise sharply. There hasn’t been a formal approach to any shareholders about issuing new shares, the people familiar with the matter said. Credit Suisse in late July said it would refashion its investment bank and exit some other businesses to become a leaner, less risky institution, following financial disasters that included a $5.1 billion hit last year from client Archegos Capital Management. The Swiss bank has a large domestic business serving all types of customers and competes globally in wealth management, investment banking and asset management. Its stock has traded below book value, a commonly followed metric by investors, for years as a succession of executive teams struggled to contain problems within the bank.

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Swiss stocks

After plunging sharply early on in the session on Monday, the Switzerland stock market recovered slowly on bargain hunting and emerged into positive territory in the final hour to eventually close modestly higher. Worries about economic slowdown, rising inflation and surging interest rates weighed down the market. The benchmark SMI, which fell to 10,097.84, ended with a gain of 23.16 points or 0.23% at 10,290.71, the day's high. Swisscom suged about 2.1%. Richemont and Partners Group both gained nearly 2%. Alcon climbed 1.6%, UBS Group gained 1.42%, Zurich Insurance Group gained 1.11% and Swiss Life Holding ended 1.07% up. Lonza Group, Sika, Holcim, Novartis and Geberit also ended higher. Logitech and ABB drifted down 1.72% and 1.62%, respectively. Credit Suisse ended nearly 1% down. In the Mid Price Index, Kuehne & Nagel, Clariant and VAT Group gained 2.4 to 2.8%. Georg Fischer climbed 1.81%, while Ems Chemie Holding, AMS, Baloise Holding, Swiss Prime Site, Adecco, Swatch Group, Julius Baer and Helvetia gained 0.9 to 1.5%. Temenos Group ended lower by about 2.2%. Bachem Holding, Lindt & Spruengli, SIG Combibloc and Straumann Holding shed 1.25 to 1.6%.

International markets


After languishing in the red till well past noon on Monday, European Stocks rallied on hectic buying in the final hour to eventually close on a positive note. Worries about inflation, rising interest rates and slowing growth rendered the mood bearish at the start, and most of the markets in the region, including the major ones, struggled for support till well past noon. However, as stocks rallied on Wall Street after data showing a drop in U.S. manufacturing activity helped ease concerns about aggressive tightening by the Fed, European stocks started climbing higher. Bargain hunting at several counters helped as well in lifting the markets. The British pound edged higher after the British government reversed plans to cut the highest rate of income tax that helped to spark a rebellion in her party and turmoil in financial markets. The pan European Stoxx 600 climbed 0.77%. The U.K.'s FTSE 100 gained 0.22%, Germany's DAX surged 0.79% and France's CAC 40 gained 0.55%. Switzerland's SMI advanced 0.32%. Among other markets in Europe, Austria, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkiye closed with sharp to moderate gains. Belgium edged up marginally, while Czech Republic and Iceland ended weak. In the UK market, BT Group rallied nearly 4.5%. Fresnillo, B&M European Value Retail, Barratt Developments, JD Sports Fashion, Persimmon, Airtel Africa, SSE, Vodafone Group, Legal & General Group, Taylor Wimpey, Aviva, Shell, BP, Burberry Group, Kingfisher and Anglo American Plc gained 2 to 4%.

United States

U.S. stocks started the new quarter higher, a tentative sign of relief for investors after a long and punishing stretch of down days. The Dow Jones Industrial Average climbed 765.38 points, or 2.7%, to 29490.89. The S&P 500 added 92.81 points, or 2.6%, to 3678.43 and the Nasdaq Composite rose 239.82 points, or 2.3%, to 10815.43. Both the S&P and Nasdaq notched their best first day of any quarter since 2009, according to Dow Jones Market Data. The broad-based gains came after stocks closed out a losing week, month and quarter on Friday, when all three indexes closed at their lowest levels of the year. Stocks have sustained deep losses for the first nine months of the year as central bank officials have increasingly made clear that interest-rate increases and monetary tightening will continue. The Dow last week fell into a bear market, a decline of 20% or more from a recent high. All 11 sectors of the S&P 500 ended the day in positive territory, with the energy sector up 5.8%. Marathon Oil gained $2.39, or 11%, to $24.97. Dominion Energy rose $1.98, or 2.9%, to $71.09 and ConocoPhillips added $7.63, or 7.5%, to $109.97. Shares of Tesla slipped $22.85, or 8.6%, to $242.40 after quarterly vehicle deliveries for the electric-car maker fell short of analysts' forecasts. Nvidia Corp. moved to cease operations and close its offices in Russia, saying it could no longer operate effectively in the country because of recent events related to the invasion in Ukraine. The chip maker on Monday said it would withdraw from Russia after it had previously suspended shipments to the country.


Stock markets in East Asia rose sharply on Tuesday in the wake of very firm US data. In Tokyo, the Nikkei-225 gained around 2.8 per cent to 26,944 points, while in Seoul it also rose steeply by 2.4 per cent after trading there was suspended at the beginning of the week due to a public holiday. There is no trading on the Chinese stock exchanges due to the holiday, in Hong Kong only on Tuesday, in Shanghai only on Monday of next week due to the so-called golden week.


In U.S. bond markets, the yield on the benchmark 10-year Treasury note ticked down to 3.650% from 3.802% Friday. Yields and prices move inversely.


UBS raises Hermes to Buy (Neutral) – Target EUR 1,382 (1,101)

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